AI helps Apple surpass Microsoft to become the world's most valuable company

On Wednesday, Apple topped the list of the world's highest market value companies.

Apple's stock price experienced ups and downs this week. On Monday, at the opening of the Apple Worldwide Developers Conference (WWDC), investors seemed disappointed with the content of the "conference," feeling that Apple did not reveal much useful information about AI. As a result, Apple's stock price fell by nearly 2%, ranking second worst among the "FAANG" stocks, behind Nvidia in market value.

However, on Tuesday, analysts predicted that Apple's AI products would stimulate consumers to upgrade their iPhones. Wall Street quickly changed its tune, with firms like DA Davison and Bank of America Merrill Lynch raising Apple's target price to $230 overnight. Apple's stock price surged by 7%, hitting a record high and overtaking Nvidia to become the second largest stock in the US market.

On Wednesday, Apple's upward trend continued, with a 4% increase at the opening and a peak increase of nearly 5.3% in the morning session, reaching an intraday high of $218.12, pushing its market value over $3.3 trillion. This helped Apple surpass Microsoft and reclaim the number one spot in the US stock market.

Analysts pointed out that in the rapidly developing field of AI, Apple had once lagged behind its competitors Microsoft and Google. However, in May, Apple announced quarterly financial results and performance guidance that slightly exceeded market expectations, as well as a $110 billion stock buyback plan, which successfully alleviated concerns about its stock performance.

Moreover, at the Apple Worldwide Developers Conference, a series of AI technologies announced by Apple have made Wall Street optimistic about Apple's future growth potential. As of the close of trading on Tuesday, Apple's cumulative increase was nearly 7.6%, still lower than Microsoft's 16.9% and Google's 26.6%.

How does Wall Street view this?

Sell-side analysts are very optimistic about Apple's market prospects. They believe that the launch of new AI features by Apple this year will stimulate a large-scale device upgrade cycle, especially considering that less than 10% of iPhones currently support these latest features. Indeed, under economic pressure, it is still uncertain whether consumers are willing to pay expensive fees for upgrades, but the optimistic sentiment in the stock market this week suggests that consumers may be willing to do so.

Michael James, Managing Director of Stock Trading at Los Angeles-based Wedbush Securities, said:

"All doubts about Apple lagging behind in AI technology were answered at the Worldwide Developers Conference. The details of AI technology integrated into the new iPhone clearly indicate an urgent need for these innovative features in the market."

Renowned Apple analyst Ming-Chi Kuo released an article on Wednesday titled "How Apple Defines AI on Devices and Future Trends," stating: Currently, the AI functions of the Samsung S24 phone are still relatively limited, and Microsoft's AIPC has not provided consumers with a clear understanding. Only Apple has redefined AI on terminals. Consumers may feel confused when buying Microsoft's AI PC (they need to calculate whether it reaches 40 TOPS before purchasing), while Apple directly informs consumers which models can support Apple Intelligence. Regardless of whether the AI applications on the device meet consumer needs, Apple has had a clear sales advantage from the beginning. At least Apple has successfully conveyed to the public the rich features and unique selling points of its edge AI.

The AI capabilities of Samsung's S24 are limited, Microsoft's AI PC still confuses consumers, and Apple has successfully defined terminal AI (at least consumers are aware of the rich AI features and selling points of Apple AI devices), which will accelerate competitors' imitation and catching up, thereby driving rapid growth in AI-related industries on devices.

However, whether the user experience is as good as Apple claims remains to be seen (for example, Google's Gemini has made exaggerated claims in its promotion).

Analysts at Evercore particularly emphasized:

"Apple further solidifies our belief that AI technology can lead the iPhone into a super growth cycle."

The analyst team at Wedbush Securities, led by Dan Ives, is very optimistic, stating:

"Although Wall Street's positive response to Apple's intelligent technology came a bit late, this marks the beginning of investors comprehensively understanding that the AI revolution will bring substantial changes to a wide range of consumers through Apple devices in the next year."

Analyst Daniel O'Regan from Mizuho Securities commented:

"Apple has done well in meeting market expectations. Although its intelligent technology has not brought revolutionary breakthroughs, it signals that the company is steadily moving in the right direction. From the most pessimistic perspective, this helps boost market sentiment. From the most optimistic perspective, if these technologies are proven to be groundbreaking, they may trigger a larger wave of product updates."

How do netizens view it?

Some netizens on the social media platform X said, "Apple's integration of ChatGPT means that billions of people on Earth will use artificial intelligence. This will bring upgrades to Apple phones for everyone, benefiting Apple. Data centers and energy usage will skyrocket."

There are also netizens who said, "Seeing the chat content of Apple Vision Pro version is really cool."